Con Ed takes over work, contracts and costs on MTA electrical repairs

When it comes to electrical problems afflicting New York City’s subway system, Gov. Andrew Cuomo has made one thing clear: the blame lies largely with Con Edison, the utility that supplies electricity to the state-run network, rather than with the subway system’s electrical equipment itself.

“The MTA doesn’t control the power,” Cuomo said in July. “Con Edison does.”

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He attributed some 32,000 subway delays a year to power issues. When reporters pressed the MTA to explain which of those delays were the MTA’s fault versus Con Edison’s, the MTA demurred.In August, a Con Ed spokesman said the company did not know where that number came from either and that it had not come up in conversations with MTA officials.

“When you were a kid and you had a train set, you had to plug it in,” Cuomo explained in July. “We have to plug in the MTA every morning.”

Now, Cuomo appears inclined to make the utility pay not only reputationally, but also monetarily.

In an unusual financial arrangement that has privately raised concerns among government insiders, Cuomo — via the Public Service Commission he also effectively controls — has ordered the utility to pay not only for repairs to Con Edison’s substations, cables and sensors, but also for contractors to inspect and repair the electrical infrastructure within the MTA’s subway system itself.

And if Con Ed has to incur additional costs, that typically means its customers in New York City and Westchester have to foot the bill.

”So Con Edison ratepayers, customers, people like me, are going to be paying for these electrical improvements to the MTA’s infrastructure,” said John Kaehny, executive director of Reinvent Albany. “We’re advocates for public transit but this is not how you fund public transit. ... It’s a way of charging and hiding your true costs of operation.”

Though the order is dated Oct. 19, it was only released Nov. 10. Typically, the commission posts its orders within a few days.

In the order, the commission “enhances the scope of work to be undertaken by Con Edison,” and directs the utility to not only take over contracts the MTA entered into for work on energy distribution rooms, relay rooms and trackside equipment, but also to hire new contractors to complete the work.

“Con Edison will hire contractors that have related expertise to perform the following work under MTA oversight, including providing necessary repairs and replacements … and make provision for the amount of any prior payments by the MTA, or amounts due, to such contractor for the completed portion of such scope of work to be payable by Con Edison,” the order states.

A review of what parts of the electrical system serving the subway were Con Ed’s responsibility versus the MTA’s found they were “intertwined,” according to the commission.

Theoretically, the Public Service Commission could allow Con Edison to seek reimbursement from the MTA, but there are several reasons why that would be unlikely. The MTA is already struggling to fund repairs, and the governor effectively controls both the commission and the MTA. The utility is dependent on the commission for rate increases and profits.

By all accounts, Con Edison and the MTA are working collaboratively.

"We recognize the urgency to improve service on the MTA, and the critical role the subway system plays for millions of New Yorkers every day,” Con Ed spokesman Mike Clendenin said in a statement. “We have been working closely with the MTA on inspections and upgrades on both their electrical equipment and ours, and we've already seen some major success with the installation of smart meters and other technology. The issue of reimbursement will be determined by the PSC."

The MTA didn’t respond to specific questions about its arrangement with Con Edison, but in a statement, MTA spokesman Jon Weinstein stressed that the partnership was already yielding results.

“The MTA is working with ConEd to ensure power-related subway problems are addressed and this work is already starting to pay off for riders,” he said. “Smart Meter technology helped deter a power-issue and avoid a major service disruption in Brooklyn in the last two weeks and more technology is coming online every day.”

The oddly financed repair work may now be moving ahead nicely, but it wasn’t always thus.

When the union that represents subway workers discovered that outside contractors would be conducting maintenance work in their subway system, infringing on a space the union traditionally controls, its leaders were incensed.

“And then we struck a deal to be not so much partners, but cooperating together to get it done,” said John Chiarello, the Maintenance of Way vice president at the Transport Workers Union.

According to that deal, Con Ed is doing lots of electrical analysis and “small stuff,” said Chiarello. Together, MTA workers and the contractors are developing a punch list.

“This is decades old equipment that needs to be forensically checked,” he said.

Neither the commission, Con Ed, nor the MTA were able to provide cost estimates for the electrical work being done on the MTA or Con Ed’s systems. But during an August tour of the subway’s inner workings with Cuomo, before Con Ed was saddled with work on MTA-owned facilities, Con Ed Chairman John McAvoy said it would be in the tens of millions of dollars. The commission has directed Con Ed to track and account for all costs related to its work under the order.

The normally under-the-radar issue of electrical supply became front-page fodder in April, after an electrical burnout at 53rd Street and 7th Avenue caused a cascade of delays across the subway system.

Cuomo, already under fire for the deteriorating state of the subway system, immediately called for an investigation into Con Edison.

“Simply put, this was completely unacceptable,” he said at the time.

Con Ed ultimately acknowledged responsibility for the April power outage, as well as another on May 7. Commission staff concluded that Con Ed failed to properly document a power rerouting, delaying the repair of electrical systems after the April 21 outage.

The original order issued by the commission in August specifically said Con Ed would not be responsible for work on MTA facilities. Utility customers, like homeowners or the MTA, must typically pay for their own electrical systems and upgrades to ensure reliability if they are particularly sensitive to minor power fluctuations, as MTA’s system is.

At the time, Richard Berkley, executive director of the Public Utility Law Project, which advocates on behalf of consumers, warned that that the costs may be shifted to Con Ed's customers.

“We’re concerned that for an incredibly necessary repair like this, which everyone agrees needs to be done ... that the burden is going to fall on the ratepayers that was neither anticipated or in the end fair,” he said.

It now appears more likely that warning may prove true.

The new order excludes the language indemnifying Con Ed and instead specifically says the utility will take over payment for some work already done and the future repairs and inspections of 1,100 energy distribution rooms, 300 signal relay rooms, 15,000 track circuits, 11,000 signals, 13,750 insulated joints, 11,000 trip stops, 220 interlockings and 1,800 switch machines.

The commission said it would decide in future rate cases whether to allow Con Ed to recover these costs.

“Governor Cuomo declared a state of emergency for the subway system after significant electrical problems and other issues caused countless delays for millions of New Yorkers,” said Public Service Commission spokesman James Denn. ”In response to this bold declaration, the PSC investigated Con Ed’s electrical systems and ultimately ordered Con Ed to take steps with specific timelines to improve service — the fruits of which we are already seeing with new smart meters that help stop power outages.”

A spokesman for the governor did not respond to a request for comment.